Tax holiday is a tax facility that applies to newly established companies that are given the freedom to pay corporate income tax within a certain period.
The tax holiday is a determining factor in attracting investment in various sectors. The tax holiday itself is a tax incentive for business actors. For example, corporate income tax (PPh) exemptions for a certain period are reduced.
Several provisions must be met to obtain this tax incentive, ranging from the number of employments, innovation, pioneer industry, and minimal investment.
Based on the Regulation of the Minister of Finance of the Republic of Indonesia Number 130/PMK.010/2020 concerning Provision of Corporate Income Tax Reduction Facilities and Investment Coordinating Board Regulation Number 7 of 2020 concerning Details of Business Fields and Types of Pioneer Industrial Production and Procedures for Providing Corporate Income Tax Reduction Facilities, Corporate Taxpayers who make new investments in Pioneer Industries may obtain corporate Income Tax deductions on income received or earned from the Main Business Activities carried out.
Initially, the minimum investment value was IDR 1 trillion. Then the Ministry of Finance lowered the investment limit to obtain a tax holiday to Rp500 billion.
Source: www. oss.go.id